While earlier American companies faced network security incidents from Chinese infosec professionals who stole huge quantities of U.S. consumer data which led to a U.S-China agreement to not attack each other corporate networks, access to the all-important consumer data is now being routed through mergers & acquisitions and purchase of stakes in U.S. companies.

In a significant development for Chinese investments in U.S companies, China’s HNA Group’s $416 million investment in U.S. Global Eagle Entertainment Inc, an in-flight services company, has fallen through since it was flagged as a U.S. national security concern.

HNA now awaits a U.S. government approval for purchasing a majority stake in SkyBridge Capital LLC, a hedge investment fund firm from Anthony Scaramucci, U.S. President Donald Trump’s new communications director.

According to a securities filing late Tuesday, Global Eagle said the deal was canceled because the Committee on Foreign Investment in the United States (CFIUS) had not completed its national security review by the “outside date” agreed in its deal with HNA.

The price of Global Eagle’s share was down by 11% at $2.98 on Nasdaq.

Although neither HNA nor Global Eagle elaborated on the reasons for not clearing the regulatory hurdle, as per a source familiar with the matter at hand, the protection of customer data that would have passed through Global Eagle’s WiFi service, was a major cause of concern for CFIUS.

“Anytime you do anything with a communication system, there’s always additional caution,” said James Lewis, a senior vice president at the Center for Strategic and International Studies, who followed the deal but was not involved in it.

HNA’s hurdle has resonance in China, with Beijing increasingly scrutinizing banking relationships and is aggressive overseeing overseas deals as it looks to stem the outflow of capital from its shores.

In recent years, with the crumbling of the Chinese economy, Chinese companies have begun integrating themselves in the global economy through mergers and acquisitions. As a result they have announced 87 deals in the U.S. alone, a record high and up from 77 in the corresponding period of 2016.

Aware of their game plan, U.S. authorities have increasingly scrutinized the deals, especially where there are national security concerns. As a result of heightened CFIUS scrutiny, many deals have collapsed.

Case in point: the sale of U.S. electronics manufacturer Inseego Corp’s MiFi mobile hotspot unit to TCL Industries, a Chinese smartphone manufacturer came to a grinding halt as a result of CFIUS action.